Argentina Jan Inflation Up 2.9% Amid Index Reform Backlash: ARS, Merval, and CPI Tensions

January inflation in Argentina rose 2.9% year-over-year, per INDEC, outpacing expectations and continuing a fifth consecutive monthly increase, driven by higher food, restaurant, hotel, and utility prices. The report spotlighted renewed political tension over the outdated index based on 2004 consumption data, which underweights present-day goods and public services and has drawn criticism for failing to reflect subsidies cuts and rising electricity costs. The Milei administration announced plans to reform the index but paused its use for the first time this month, reigniting distrust and prompting the resignation of INDEC head. The move sent the Merval index down several percentage points and raised concerns over credibility and investor confidence. Economists warn that continued subsidy reductions and a more flexible peso policy could fuel further inflation, while private-sector price gains lag behind the official figure.